Stocks set record highs once again as tech surged mid-week, then retreated on soft retail data and less optimism on a trade solution with China. In all, the Dow fell 0.5%, to 27,875.62; the S&P 500 lost 0.3%, to 3,110.29; and the Nasdaq Composite shed 0.3%, to 8,519.88. Health care stocks were strong with a nice one percent gain, but utilities and financials were barely positive. All other sectors were in the red with telecom stocks (that now include more volatile social media-type firms) negative by 2%.
More than 90% of the companies in the S&P 500 Index have reported results for the third quarter. Of these, 75% have posted positive earnings surprises and 60% have done so on the top line. These latest results are continuing a positive trend in place in recent years. Importantly, this upbeat profit trend should continue in the current quarter and through the first half of 2020, with further bullish implications for a stock market that is reaching new highs on an almost daily basis. That said, overall results are less overwhelming, with selective sectors, such as energy, pressuring the overall performance. Nonetheless, with most companies routinely beating forecasts, earnings should remain a positive variable for the equity market going forward.
Overall, the profit news, rising dividends and a moderately strong economy is a comforting backdrop, with few excesses in place – such as some of the headline tech names. But for now, the fundamentals seem sufficiently sound for Wall Street to cope with them reasonably well. Deere & Co. will report earnings on Wednesday followed by a webcast to discuss fourth-quarter and full-year financial results. Analysts estimate per share earnings of $9.92 for the year versus $9.39 a year ago.
Thursday, markets will be closed in observance of Thanksgiving. Financial markets will close early on Friday, with stocks wrapping up trading at 1 p.m. and bonds at 2 p.m. The “Week in Review” will be suspended next week, too. Have a safe and wonderful Thanksgiving and enjoy the holiday weekend.
Today’s Trivia Question: Eddie Bauer founded his namesake company in Seattle, Washington in 1920. Today, the iconic brand is owned by? Sears Holdings, Golden Gate Capital, Cabela’s or Lands’ End.